The Energy Efficiency First (EE1st) principle has recently been placed onto the political agenda in the European Union (EU). While the general rationale for EE1st is described in EU legislation and supporting literature, a common understanding of the principle’s implications for energy-related planning, investment, and policymaking is still missing. Based on an exploratory review of the literature, the objective of this article is to improve the theoretical understanding of EE1st. First, it develops a conceptual framework, describing EE1st as a decision-making principle that prioritises demand-side resources over supply-side alternatives whenever these provide greater value to society in meeting decision objectives. Second, it highlights the unique aspects of EE1st by systematically comparing the principle with associated concepts, such as Integrated Resource Planning. Third, it provides theoretical justification for EE1st by describing the economic rationale behind the principle. Fourth, it outlines policy considerations for its practical implementation. In sum, the EE1st principle is shown to have a compelling theoretical background that can help inform the design of effective policy interventions in order to move from principle to practice.
Energy Efficiency First (EEF) is an established principle for European Union (EU) energy policy design. It highlights the exploitation of demand-side resources and prioritizes cost-effective options from the demand-side over other options from a societal cost-benefit perspective. However, the involvement of multiple decision-makers makes it difficult to implement. Therefore, we propose a flexible decision-tree framework for applying the EEF principle based on a review of relevant areas and examples. In summary, this paper contributes to applying the EEF principle by defining and distinguishing different types of cases — (1) policy-making, and (2) system planning and investment — identifying the most common elements, and proposing a decision-tree framework that can be flexibly constructed based on the elements for different cases. Finally, we exemplify the application of this framework with two example cases: (1) planning for demand-response in the power sector, and (2) planning for a district heating system.
Energy Efficiency First (EE1st) is an important concept that, if implemented, will minimise the cost of the energy transition by exploiting the end-use energy efficiency and demand response potential of end users. The power sector is particularly relevant for the application of the EE1st principle as it needs to be decarbonised early, demand is to grow due to the electrification, and due to the increasing value on demand flexibility to maintain system balance. In this paper we show that consumers need to be considered as multiple resources for the power system and examine key regulatory tools to mobilise consumers to offer their flexibility and DSOs to use this flexibility to reduce the need for network asset investment. The pricing of energy and network is key in delivering demand-side flexibility. At the same time DSOs need to consider them in their network planning by law, and regulators are encouraged to incentivise them to integrate the consumers in network operation innovatively. The European regulation provides an appropriate framework for the implementation of the principle in the power sector. It is now the tasks of national regulators to implement them effectively.
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